**U.S. Dollar Maintains Upward Momentum Following June Gains: An In-Depth Analysis**
*By: [Original Source: Futunn News, referencing Rosenberg Research]*
*Expanded and rewritten by Assistant with additional research for comprehensive coverage*
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Since mid-2023, the U.S. dollar (USD) has demonstrated a sustained upward trend, continuing a trajectory that began in the wake of major macroeconomic shifts and Federal Reserve policy moves. According to an analysis recently released by Rosenberg Research and featured in Futunn News, the USD’s recent performance reflects a combination of relative economic strength, diverging global interest rates, and risk sentiment that favors safe-haven assets.
This article explores these themes in detail while incorporating additional perspectives from other reputable financial sources including Bloomberg, Reuters, and the Wall Street Journal. Detailed market data, monetary policy implications, and future projections help paint a clearer picture of the USD’s sustained uptrend.
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## Overview: What is Driving the USD’s Strength?
Several contributing factors lie at the heart of the U.S. dollar’s continued strength:
– The Federal Reserve’s hawkish stance and higher interest rates
– Divergence in monetary policy between the U.S. and other major economies
– Resilience in the U.S. labor market and inflation data
– Capital inflows into dollar-denominated assets
– Market demand for safety amid global economic uncertainty
### The Federal Reserve’s Role
One of the most significant drivers of the rising U.S. dollar since June is the Federal Reserve’s commitment to controlling inflation, even at the risk of slowing economic growth. The Fed’s approach, according to Chair Jerome Powell’s repeated assertions, prefers to maintain high interest rates to curb persistent inflationary pressures.
– The Fed raised benchmark interest rates to a 22-year high in mid-2023, lifting them to a target range of 5.25% to 5.50%.
– This stands in stark contrast to more dovish stances in Europe and Japan, where central banks have either raised rates more cautiously or maintained accommodative policies.
– Higher interest rates translate into stronger yields on U.S. Treasury securities, which attract global capital inflows, strengthening the dollar.
As David Rosenberg, founder of Rosenberg Research and former Merrill Lynch chief economist, points out, “The U.S. dollar has found a supportive floor amid macroeconomic resilience and a policy stance by the Fed that reinforces the yield differential between the U.S. and most of its trading partners.”
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## Comparative Currency Analysis
### Euro (EUR/USD)
One of the currencies hit hard by the dollar’s rise is the euro. The EUR/USD pair has declined notably since June.
– The European Central Bank (ECB), while also tightening policy, has faced economic fragility across member countries, particularly Germany.
– Recession fears in the Eurozone, weak consumer demand, and geopolitical uncertainties (such as the war in Ukraine) have weakened the euro.
– As of early Q4 2023, the euro has declined over 4% from its June highs, trading around the 1.05–1.06 level.
### Japanese Yen (USD/JPY)
The Japanese yen has been another casualty of dollar strength.
– The Bank of Japan (BOJ) maintains ultra-low interest rates, employing yield curve control while resisting global tightening trends.
– Subsequently, the yen fell to more than 150 per U.S. dollar in October 2023, approaching intervention levels last witnessed in 2022.
– Investors prefer holding dollars over yen due to the much higher return offered by U.S. assets.
### British Pound (GBP/USD)
The British pound has also endured a moderate decline amid a relatively weaker UK economic outlook.
– Inflation remains stubborn in the UK, but the Bank of England (BoE) has raised rates cautiously to control economic fallout.
– Confidence in UK fiscal policy remains fragile due to earlier volatility in gilt markets and political uncertainty.
– As a result, the
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